Why Groupon Works

Google’s recent reported $6 billion bid for Groupon — rebuffed, for now — took observers by surprise and worried the company’s investors. James Surowiecki analyzes the deal and Groupon’s business model. “Groupon, by contrast, is a much more old-school business. It doesn’t have any obvious technological advantage. Its users don’t really do anything other than hit the ‘buy’ button,” writes Surowiecki. “And its business requires lots of hands-on attention: thousands of salespeople to sell to and service local businesses, copywriters to come up with the right pitches for customers (Groupon’s clever ad copy is one of its selling points).” Despite these caveats, Surowiecki points out that “[t]hese days, the Web is full of good, solid businesses that may not be remaking the world but that are helping give people what they want. If that’s what Groupon ends up being, well, there are worse fates.” [%comments]